I recently asked Why didn't my buy limit order become the highest bid? when my odd lot (1 share) buy limit order did not appear in the public list of bids. If odd lot buy orders do not appear in the public list, how do potential sellers know of the existence of odd lot buy orders? My buy order was eventually executed. What I don't understand is: if my order was not advertised to the public, how did the seller manage to sell their shares to me?
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2I always see my odd lot limit orders in the bits. At least at two providers. Who says the are not publicly advertised?– AganjuCommented Apr 21, 2021 at 17:06
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It seems odd lots are not mandatory to be shown, but obviously many providers show them. If your's doesn't, just check somewhere else.– AganjuCommented Apr 21, 2021 at 17:26
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@Aganju - I always see my odd lot limit orders in the bits. At least at two providers. Who says the are not publicly advertised? Are you seeing odd lot orders on NBBO quotes? On Level 2 quotes?– Bob BaerkerCommented Apr 21, 2021 at 22:32
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I don't know about level 2 - I don't look at them. If I put a limit order out above/below the current bid/ask, it changes accordingly at all providers. If the stuff is illiquid enough, I can move the bid/ask up and down a bit and monitor it at various providers (for example, I bid x for 1 share at eTrade, and the lowest bid at Vanguard/JPmorgan changes to x.)– AganjuCommented Apr 22, 2021 at 1:21
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2 Answers
The "public list" is called the "NBBO" or "National Best Bid or Offer", which is generally data disseminated through the "official" market data distribution feeds for stocks, such as the one operated under the UTP plan for NASDAQ listed securities, and the Consolidated Tape Association (CTA) for NYSE-listed or regional exchange listed securities.
As a matter of course, bids or offers are not included unless the quantity available on a given exchange exceeds 100 shares.
That does not mean better prices are not available.
The exchange may publish odd-lot or full order-book information through their own proprietary feeds that participants can obtain for a fee. Anyone subscribing to those feeds for the exchange where your order is placed will see the order.
If your order is better priced, and people trade against a non-odd-lot order behind yours on the same exchange, yours will execute first.
Some sophisticated participants may 'ping' or 'scan' other exchanges for better priced orders before going on to exchanges with orders at the NBBO according to the official feeds.
Participants are obliged to ensure that they do not lock or cross markets, so if the bid/offer is 100.00 bid, 100.05 ask, before or at the same time posting a bid for 100.06, they are obliged to remove any existing liquidity by sending orders to all exchanges with a 100.05 or 100.06 ask for the full quantity.
This obligation exists only during regular trading hours. After hours this rule does not apply.
- If your order when added to existing interest on an exchange pushes the size available over the minimum lot size of 100, will result in prices being published on the official feeds.
It can be done using bunching, which aggregates odd lot orders together as block trades, executing the odd lot orders as one transaction. The order management system usually handles this process.
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